South Korea’s exports dip as Trump tariffs squeeze trade with US and China

South Korea’s exports declined in May for the first time in four months, signalling early damage from escalating trade tensions driven by US President Donald Trump’s aggressive tariff agenda.

The slowdown in shipments to both the United States and China, South Korea’s two largest trading partners reflects the widening ripple effects of the ongoing global trade conflict.

According to Reuters, exports from Asia’s fourth-largest economy fell 1.3 per cent year-on-year in May to $57.27 billion, with trade officials warning that ongoing tariff disputes are disrupting demand for key South Korean goods.

The latest decline, though smaller than the 2.7 per cent drop forecast in a Reuters poll, marks the first contraction since January.

What does the data say

According to data released by South Korea’s Ministry of Trade, Industry and Energy on Sunday showed that exports to the United States dropped 8.1 per cent, while shipments to China fell 8.4 per cent.

These two nations collectively account for more than 35 per cent of South Korea’s total exports, underscoring the deep exposure of its economy to external demand from both Washington and Beijing, as per Reuters.

According to Reuters, despite the broader decline, semiconductor exports reportedly surged 21.2 per cent, buoyed by resilient demand for advanced memory chips.

However, car exports fell 4.4 per cent, partly due to tariffs imposed by the US and transitional delays at Hyundai Motor’s new factory in Georgia, according to the trade ministry, reported by Reuters.

On the other hand, exports to the European Union rose 4 per cent, and shipments to Taiwan soared 49.6 per cent, offsetting some of the drag from the US and China.

Meanwhile, imports dropped 5.3 per cent to $50.33 billion, resulting in a trade surplus of $6.94 billion, the largest since June 2024.

“Declines in exports to both the United States and China, the two biggest markets, suggest US tariff measures are having an impact on the global economy as well as our exports,” said South Korean Industry and Trade Minister Ahn Duk-geun, as quoted by Reuters.

US-South Korea trade ties hit turbulence

South Korea’s reliance on US trade has become more vulnerable under Trump’s “America First” trade doctrine. Since early 2025, the US administration has imposed reciprocal tariffs, including 25 per cent duties on South Korean steel and aluminium, though they are currently under a 90-day negotiation pause.

Trump recently threatened to double global tariffs on these metals to 50 per cent, sparking renewed concerns in Seoul.

According to Reuters, the recent US-China trade truce in mid-May had offered some hope of easing pressure. But President Trump’s accusation that China had violated the agreement has thrown the ceasefire into question.

The re-escalation threatens to deepen export volatility for South Korea, whose tech-driven economy depends heavily on trade flows across the Pacific.

South Korea is often viewed as a bellwether for global trade, given its strong manufacturing and export-oriented base.

With US tariffs biting into car and industrial shipments, South Korea faces a dual challenge balancing geopolitical ties with Washington while defending its economic interests.